Comparing $12B structural budget gap to $95M shortfall

is apples to oranges

The state budget is a complex series of documents and difficult choices. Only a handful of legislators really understand how it is put together and what all of it means.

No one involved in the development of the state budget relishes their role. It's difficult and incredibly time-consuming and no one much understands the affair, but today everyone has an opinion about the level of state spending.

The governor and his staff spend most of the December holiday season putting the final touches on the budget. The Legislature spends hours and hours listening to the testimony of those affected by the pages and pages of appropriations.

State employees spend hours of the work day waiting to present important, but often unwelcome information about state programs to the Appropriations Committee.

The Legislature's staff works all night before final votes on the budget, preparing amendments and fiscal notes, and the full Legislature spends hours debating amendments to the budget, most of which fail because only a few people in the House and Senate really understand how the whole budget fits together and what would happen if you changed any single item in it.

The general public doesn't stand much of a chance of comprehending the basics, let alone the important nuances, of this important policy document. Even those who try to get a copy of the legislative document that contains the budget find it impossible to read and understand.

Now we're faced with a $95 million budget shortfall (and growing). After the governor's State of the State message, several legislators were quoted predicting that this shortfall would be less of a challenge to address compared to the $1.2 billion structural budget gap in 2003.

Sure sounds plausible, because $1.2 billion is a lot bigger number than $95 million. But such comparisons are not helpful and only add to the confusion and frustration of the public struggling to make sense of it all.

A structural budget gap is an analysis done for budget forecasting purposes. It is a forecast of what it would cost to fund all the existing -- and approved -- state programs at current levels.

The emphasis on approved state programs is important because the highest costs in a structural gap are for programs that have been approved but never funded. This not a budget cut, but another decision not to fund the program at the approved level.

The best example of this was the intent of the Legislature to fund 55 percent of the costs of education, even though such a percentage would have been a significant increase over actual appropriations. The full 55 percent share was part of the structural gap for the 2004-2005 two-year budget because that legislative intent was a matter of state law, but never a matter of state budgeting.

The $1.2 billion structural gap that existed before the 2004-2005 two-year budget didn't require that state programs be cut by $1.2 billion for the gap to be addressed. If that were the case, and $1.2 billion was cut from the state budget, total general fund appropriations for 2004-2005 should have been less than total appropriations for the 2002-2003 budget cycle, but in fact they were more than $300 million higher.

A structural gap is not the same thing as a budget shortfall.

Both a structural budget gap and a budget shortfall are contentious challenges, but they aren't the same and shouldn't be compared as if they are. To do so is a purposeful understatement of the impact of the cuts that will be needed to address the current budget shortfall, since the governor has appropriately eliminated new taxes as an option.

Unlike many of the actions taken to bridge a structural gap that "cut" money that's never, ever been appropriated, the cuts suggested by the governor to address the current budget shortfall are real cuts with a greater impact.

The next few months are going to be filled with anxious moments for everyone involved in state budgeting as the new budget shortfall is addressed -- for the governor and the Legislature, for those employed by state government, for those who use and depend on state services and for all of us struggling to understand the impact of budget decisions.

An accurate portrayal of the challenge will yield greater understanding and support for the difficult decisions that lie ahead.

Kay Rand is former chief of staff for Maine independent Gov. Angus King.